Wednesday, 18 February 2009
13:41

The Maldives are best known as an upmarket tourist destination, where well-heeled visitors pay thousands of pounds a night to watch the sun sink into the crystal blue waters of the Indian Ocean.

But even in paradise, fears of a global slowdown are forcing drastic action. Such is the concern about declining income from tourism, the government has opted to sell off some of the most potent symbols of state. First to go is the presidential yacht, which will be auctioned - probably on eBay - with a reserve price of $7.5m (£5m).

Then there's the presidential "picnic island", a two-acre retreat for the Maldivian elite with private beaches, badminton courts, a gym and a cricket pitch. Now the island will be turned into a conference centre.

Tourism, which makes up more than a third of the islands' economy, has made the country by far the richest in South Asia, with a GDP per head in excess of $2,000. But with visitor numbers down by 5% in January, ministers say the fledging democracy needs to cut costs now.

Before the first democratic elections were held last October the tropical idyll was a virtual dictatorship. President Maumoon Abdul Gayoom, who stepped down after 30 years in power, was accused of running the 1,200-long island chain as a personal playground and of siphoning off profits from tourism.

The former ruler had just completed a cavernous presidential palace before he was thrown out of office. Built at a cost of $45m and with daily running costs of $30,000, the palace will be converted into government offices for an arts council and the country's first university.

The new president says he will operate from a town house, renovated for $125,000, in the capital and his government has tried to make a virtue of the bleak outlook for the economy, saying that it no longer wants to be associated with the former emblems of autocracy.

Mohamed Nasheed, a former Amnesty prisoner of conscience who became the Maldives' first freely-elected president, says he wants to "cut back on the trappings of power" left over from the previous regime. "In a democratic society, particularly at this time of economic hardship, it isn't appropriate for a president to be cruising around in multi-million dollar yachts and padding about palaces," he said.

The savings, says the new government, will release much-needed funds at a time when it needs to pay for debts run up by the previous regime. The Maldives says it needs help to survive the current economic crisis.

"There is no money in the country. We have to live off the money that is coming in every day. When we took over as the government we inherited a huge debt without a significant reserve," said the vice-president, Mohamed Waheed Hassan Manik.

Gayoom's party, the Dhivehi Rayyithunge party (DRP), denied that the former president had been lavish in his spending saying these were important images of office.

Abdulla Mausoom of the DRP said there were "more pressing issues" the government should be concerned about. "Selling a chair that the president used is not a change. They should make certain changes rather than selling off a speedboat or a dinghy. Nasheed has appointed over 68 ministers and state ministers already. If you are talking of a lean government, there are other things you should be doing," he said.